Things That Blow A Lot

Bob Stevenson is at it again.

Yesterday, dear Bob penned his weekly Clean Line sales pitch in the Hannibal Courier-Post, just like clockwork.  And guess what?  Also like clockwork, Bob gets the facts wrong again!

Bob's premise this week attempts to rely on the Missouri Public Service Commission Order denying the application of Grain Belt Express.  All 27 pages!  Bob also thinks the dissents of a minority of the Commissioners have some relevance.  But, remember, they are the minority opinion and only good for appeals, which never happened.

Bob says:

With its disapproval last July, the Public Service Commission (PSC) invited CLE to correct some serious deficiencies in their application and re-apply. The most serious deficiency noted by the PSC was that CLE had no specific electric customers in the state.

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But the PSC rejected their original application, encouraging the company to find specific wholesale customers within the state.

I'm thinking that Bob never actually read the MO PSC Order at all, because it doesn't say that.  Not even close!  Likewise, the dissents Bob touts don't say that either.  In a tiny footnote at the bottom of the Order, the PSC notes:

As some parties have recently noted, GBE has the option to file a new application for a CCN at any point if it eventually gathers information it feels would make a better case for this project or a new project. See Staff’s Response to the Recommendation of Grain Belt Express Clean Line LLC, EFIS No. 544, and Response of the Missouri Landowners Alliance to Recommendation of Grain Belt Express to Hold Case in Abeyance, EFIS No. 540.

This is merely an indication of a denial without prejudice.  It is not a guarantee that if GBE files a new application, it will be successful.  It would be exceedingly rare if a Commission issued a denial with prejudice, which would mean the company could not reapply.  GBE is free to apply as many times as its budget will allow.

And it does NOT indicate what information GBE should gather to make a better case for its project, such as tossing the eviscerated bodies of a few Missouri municipalities on the table.  It means curing all the deficiencies the PSC noted, such as:

GBE has failed to meet, by a preponderance of the evidence, its burden of proof to demonstrate that the Project as described in its application for a certificate of convenience and necessity is necessary or convenient for the public service.

When making a determination of whether an applicant or project is convenient or necessary, the Commission has traditionally applied five criteria, commonly known as the Tartan factors, which are as follows:

1. a)  There must be a need for the service;
   
2. b)  The applicant must be qualified to provide the proposed service;
   
3. c)  The applicant must have the financial ability to provide the service;
   
4. d)  The applicant’s proposal must be economically feasible; and
   
5. e)  The service must promote the public interest.
   

However, the evidence showed that the Project is not needed for Missouri investor-owned utilities to meet the requirements of the RES.

The Project is not needed for grid reliability because GBE did not submit the Project to the regional planning process, has not identified any existing deficiency or inadequacy in the grid that the project addresses, and has not shown that the project is the best or least- cost way to achieve more reliability. 

Although GBE elected not to submit the Project to the MISO regional transmission process, MISO has an effective planning process to enable states in the MISO footprint, which includes portions of Missouri, to meet RES requirements using renewable wind resources. Since areas of MISO have some of the best wind energy resources in the United States, it is more likely that the large amount of available MISO wind can satisfy the needs of Missouri utilities for wind energy compared to the smaller amount of Kansas wind that GBE proposes to inject into MISO at the Missouri converter station. The Commission concludes that GBE has failed to meet its burden of proof to demonstrate that the service it proposes in its application for a certificate of convenience and necessity is needed in Missouri.

GBE has not presented adequate evidence to show that the Project is economically feasible.
Staff made credible criticisms of the GBE studies and pointed out the large amount of important information that is not known about the impact of the Project on Missouri. Interconnection studies with SPP, MISO and PJM have not been completed or are inconsistent with the Project’s current design, plans for operations, maintenance or emergency restoration have not yet been developed by GBE, and GBE production modeling studies do not support GBE’s claims that retail electric rates would decrease. In addition, there is a good chance that Project costs would increase beyond what was estimated by GBE due to transmission upgrades, congestion, wind integration and the need for additional ramping capacity.
Dr. Michael Proctor presented credible evidence that Ameren Missouri would have lower-cost alternatives than the Project for meeting its need for capacity and energy, both with and without considering the renewable energy requirements of the Missouri RES. GBE failed to perform adequate studies and present sufficient evidence on this analysis, which the Commission would need to properly evaluate economic feasibility of the Project. Dr. Proctor’s analysis showed that natural gas-fired combined cycle generation is the most cost-effective generation alternative, and that wind energy from areas of MISO or through the purchase of RECs are a lower cost alternative to wind energy generated by the Project. Therefore, the Project is not the least-cost alternative for meeting Missouri’s future needs for either energy and capacity or renewable energy, so it is highly unlikely to meet the Commission’s rule for 1% rate impact limitation from renewable energy.

Since the Commission has concluded that GBE has not met two of the Tartan factors, by that standard GBE cannot show that the Project promotes the public interest.

However, the Commission will also consider further some of the specific public benefits of the Project claimed by GBE.

As Staff witnesses point out, as a result of GBE’s inadequate production modeling studies, GBE’s claims that the Project would lead to lower renewable energy compliance costs, lower wholesale electric prices, lower retail electric rates, and reduce the need to generate electricity from fossil-fueled power plants are not sufficiently supported by the record. Moreover, the Project is not needed to satisfy the Missouri RES requirements. Although GBE argues that the Project will make wind energy more accessible to MISO and PJM customers, the evidence shows that wind energy is already accessible in those regions and, at least in MISO, has more than doubled as a percentage of total energy generated in the last three years. GBE alleges that the Project would result in economic benefits, but its studies are not reliable, as they fail to consider any negative economic impacts resulting from job displacement and energy production. Finally, GBE touts the Project as a way for Missouri to access affordable clean energy as increasing environmental regulations increase costs for coal plants. It is too soon to say what the impact of the proposal will be on Missouri.

In this case the evidence shows that any actual benefits to the general public from the Project are outweighed by the burdens on affected landowners. The Commission concludes that GBE has failed to meet its burden of proof to demonstrate that the Project as described in its application for a certificate of convenience and necessity promotes the public interest.

Nope.  Nothing in there about "the most serious deficiency noted by the PSC was that CLE had no specific electric customers in the state."  Nothing about having electric customers in the state at all.  There is a plethora of issues GBE must cure in a second application, and having customers in Missouri is not one of them.

Having customers in Missouri appears to be a creation of GBE.  Instead of curing its real deficiencies, GBE seems to be of the mind that if it produces some customers, or merely "good witnesses," that all the other deficiencies will go away.  That's rather naive.  Perhaps GBE thinks that it can use Missouri municipalities as hostages in a future PSC case?  If GBE can coerce municipalities to heedlessly "invest" in its project, then perhaps it may base a future case on the financial harm that would come to the municipalities' ratepayers if the project isn't approved by the PSC.  GBE certainly can't be thinking that producing a municipal witness like Bob can cure all the deficiencies in the Order, can they?  I don't believe that Bob's "expertise" in utility matters could outweigh that of other witnesses to cure the defects.  I'm guessing Bob would only serve as a fattened pig for slaughter at the PSC.

The evidence is in this Order.  Bob's continued denial of the facts, and reliance on his own wishful thinking to support GBE, is harmful to the ratepayers it is his duty to serve.  Bob's first allegiance should be to provide economic electric service to the citizens of Hannibal.  To deny the expert determination of the MO PSC, and even Clean Line's own presentation that showed MISO wind as a comparable option to its project, Bob certainly can't be serving the ratepayers.  Who does Bob serve?